Community Legal Services, Inc. of Philadelphia (Community Legal Services), appeals on behalf of its client, Charles Allen, from an order awarding attorneys fees under the Equal Access to Justice Act, 28 U.S.C. § 2412(d) (Supp. III (1985) (EAJA). Allen, an application for disability benefits under the Social Security Act, was successful in obtaining judicial review, pursuant to 29 U.S.C. § 405(g) (1982), of the initial agency denial of such benefits, and after a remand from the district court, ultimately received an award. Allen requested attorneys fees, and the district court, finding that the Secretary's position had not been substantially justified, awarded $75.00 and hour for 13.5 hours of legal services. The court refused, however, to adjust the $75.00 an hour rate upward to take into account inflation since that statutory rate was fixed in 1981. The court held hat Congressional reenactment of the AJA in August 1985 required that inflation prior to that date must be disregarded. Alternatively, the court concluded that Allen failed to justify the cost of living adjustment. We will reverse.

I.

Although the amount involved in this appeal is small, the issue of statutory interpretation is of considerable significance to legal services organizations which represent claimants against federal agencies. Section 2412(d)(1)(A) of the EAJA provides for a mandatory award of counsel fees to qualified prevailing parties in certain civil actions against the United States. Section 2412(d)(2)(A)(ii) provides that "attorney fees shall not be awarded in excess of $75 per hour unless the court determine that an increase in the cost of living . . . justifies a higher fee." We have noted that "the cost of living adjustment provision seems designed to provide a disincentive to agencies to prolong the litigation process." Natural Resources Defense Council, Inc. v. Environmental Protection Agency, 703 F.2d 700, 713 (3d Cir. 1983).

originally enacted in 1980, the Equal Access to Justice Act became effective on October 1, 1981. The Act provided, however,

Effective October 1, 1984, subsection (d) of section 2412, as added by subsection (a) of this section, is repealed, except that the provisions of that subsection shall continue to apply through final disposition of any action commenced before the date of repeal.

Pub. L. 96-481 § 204(c), 94 Stat. 2329. The legislative history of Pub. L. 96-481 describes this "is repealed" language as a "sunset provision, repealing subsection (d) of section 2412 of title 28 at the end of three years . . . " H.R. Rep. No. 1418, 96th Cong., 2d Sess. 19, reprinted in 1980 U.S. Code Cong. & Admin. News 4984, 4998. Clearly, however, there was no sunset with respect to actions commenced prior to October 1, 1984.

Allen's section 405(g) petition for review was filed on October 26, 1983, and the remand to the agency occurred on January 26, 1984. Thus if section 204(c) of Pub. L. 96-481 were to still govern, Allen would be entitled not only to a fee award, but to the cost of living adjustment authorized by section 204(a) of that statute.

Before the October 21, 1984 sunset date, Congress considered making the Equal Access to Justice Act permanent. On August 5, 1985 it enacted pub. L. 99-80, 90 Stat. 183 (Aug. 5, 1985), codified at 5 U.S.C. § 504 and 28 U.S.C. § 2412. The language chosen in making the Act permanent is found in sections 6 and 7:

SEC. 6. TREATMENT OF EXPIRED PROVISIONS OF LAW.

(a) Revival of Certain Expired Provisions. Section 504 of title 5, United States Code, and the item relating to that section in the table of sections of chapter 5 of title 5, United States Code, and subsection (d) of section 2412 of title 28, United States Code, shall be effective on or after the date of the enactment of this Act as if they ...

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